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Welfare Reform. David Gray Welfare Rights Manager Peter McCann Head of Revenues and Benefits and Customer Services. Overview of presentation. 1) Welfare agenda Dave 2) Changes from April Peter 3) Longer term changes Dave. Royal Assent 8/3/12

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Welfare reform

Welfare Reform

David Gray

Welfare Rights Manager

Peter McCann

Head of Revenues and Benefits and Customer Services


Overview of presentation
Overview of presentation

  • 1) Welfare agenda Dave

  • 2) Changes from April Peter

  • 3) Longer term changes Dave


Welfare reform act 2012

  • Royal Assent 8/3/12

  • Biggest Change to welfare system in 60 years

  • Stated intentions of Government

    • – Make work pay

  • - Protect the vulnerable

  • - Fair to tax payers

  • - Fair to benefit claimants

  • Welfare Reform Act 2012



    Measures

    • Universal Credit

    • Housing Benefit Reform

    • Abolition of Council Tax Benefit

    • Personal Independence Payments (PIP)

    • Employment Support Allowance

    • Enhanced benefit sanctions

    Measures


    Introduction

    1. Bedroom Tax

    2. Discretionary Support Scheme

    3. Council Tax Reduction Scheme

    4. Discretionary Housing Payments

    5. Benefits Cap

    6. Council Tax Empty Property Charge



    Bedroom tax
    Bedroom Tax

    One bedroom calculated for each of the following:

    • A single claimant or every adult couple

    • Any single adult aged 16 or over

    • Any two children under age 10

    • Any two children of the same sex aged up to 15

    • Any other child (other than a foster child or child whose main residence is elsewhere)

    • A non-resident overnight carer


    Housing benefit bedroom tax

    Housing Benefit – Bedroom Tax


    Housing benefit bedroom tax1
    Housing Benefit – Bedroom Tax rent

    Exemptions:

    • Temporary accommodation

    • Supported accommodation

    • Claimant or partner qualifies for state pension credit

      Protections:

    • Recent bereavement – 12 months

    • New claim – 13 weeks


    What is halton bc doing
    What is Halton BC doing? rent

    • Supplied lists to RSLs of households affected

    • December 2012 - Council wrote to claimants informing of under occupancy

    • Number of bedrooms & household composition

    • Amount of Housing Benefit reduction

    • Claimants requested to inform HBC if household composition is incorrect

    • Over night care cases identified

    • Disabled adaptations identified


    Non dependants
    Non Dependants rent

    • Where are they?



    • From April Halton Council has a new scheme which may or may not be able to help you

    • Not a like for like replacement


    Background

    • As a result of the Welfare Reform Bill, the national Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Crisis Loans for general living expenses and Community Care Grants will be replaced by new local assistance schemes to be administered by Local Authorities

    • Expected that the grant to LAs will be based on the equivalent social fund spend 2012-13 (£178m) But Halton £100k down on 2011/2012!

    • Will be non-ring fenced

    • No new statutory duties to provide local scheme

    Background


    Changes to the Social Fund Scheme from April 2013 Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Regulated scheme

    • Sure Start Maternity Grants

    • Funeral Payments

    • Cold Weather Payments

    • Winter Fuel Payments

    • Discretionary scheme

    • Budgeting Loans

    • Crisis Loans

      • -Alignment Payment

      • -General living expenses

    • Community Care Grants

    Remains with DWP

    Locally designed & administered provision


    Awards 2011 12
    Awards 2011/12 Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013


    • No cash Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Freephone number

    • List of considerations reduced

    • Online applications for support in community


    Key message
    Key Message Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Discretionary Social Fund now no longer exists

    • Halton Council may be able to help you


    Council tax support scheme abolition of council tax benefit from april 2013

    Council Tax Support Scheme Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013(Abolition of Council Tax Benefit from April 2013)


    Current Position Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    Expenditure:Housing Benefit £52mCouncil Tax Benefit £11mCaseload:Housing Benefit 13,014Council Tax Benefit 15,305


    Current council tax benefit scheme

    Council Tax Benefit caseload & expenditure Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    Current Council Tax Benefit Scheme


    Current Position Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Demand led

    • Funding- Councils are reimbursed 100% of the full amount of Council Tax Benefit paid out correctly

    • From April 2013 Council Tax Benefit will be abolished and replaced by a locally designed scheme


    A Local Scheme - BUT….. Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • New local scheme should:

    • Protect pensioners ( 41% of Halton’s benefit caseload are pensioners)

    • Take into account vulnerable groups – responsibilities regarding child poverty, the disabled, homelessness and equalities

    • Incentivise people to work

    • But:

    • There will be a 10% reduction in funding (equates to £1.4m in Halton)

    • The pensioner protection increases the burden to around 18% for working age claimants

    • Any expenditure above the cash specific sum must be met pound for pound by LA

    • The more people protected the higher the burden


    The Scheme Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Reduction in non pensioner benefit of a % amount to be deducted at the end of the calculation

    • The % amount to be determined by Members each year once the grant details have been received

    • For 2013/2014 it will be 21.55%


    The Scheme Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • The % reduction ensures that the cut is shared equally

    • Retaining present system ensures the in-built protection for various groups is maintained

    • Small sums will be billed ( poll tax)

    • Average between £2 & £4 per week

    • People billed for the first time


    General Issues Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Increased cost of recovery

    • Small amounts soon become big

    • Difficulty in gauging future demand & subsequent financial impact

    • 3 schemes will be operating

    • Confusion

    • Have written to 9,000 households at the start of the year


    Key message1
    Key Message Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Don’t ignore the Council Tax Bill

    • Get in touch with the Council


    Benefits Cap Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013


    Benefit cap

    • As part of the Welfare Reform Bill, a cap on the maximum amount working- age households can claim in benefits will be introduced from April 2013 (now summer 2013)

    • This is to prevent claimants receiving more income from benefits than the average wage paid to those who are working.

    • The cap is set at £26k per annum (£500 per week for households with children or £350 per week for single claimants without children).

    • Some benefits are excluded such as Working Tax Credits and Disability Living Allowance.

    • Department for Work and Pensions (DWP) have written to all households that they think may be affected.

    • DWP have identified 104 households in Halton that may be effected (have incomes of between £26k and £46k).

    • DWP have wrongly identified some clients as being effected.

    Benefit Cap


    Benefit cap1

    • Until the implementation of Universal Credit, the cap will be applied to Housing Benefit

    • Owner Occupiers will not be effected until transfer to Universal Credit

    • Claimants likely to see it as a reduction in Housing Benefit rather than a reduction in overall benefits

    • Have written to 100 people

    Benefit Cap


    Discretionary Housing Payments be applied to Housing Benefit


    Discretionary Housing Payments be applied to Housing Benefit

    • Amount increased from £87k to £282k

    • Bedroom Tax alone is £1.8m shortfall

    • Publicity states that this will be the safeguard!


    Council Tax be applied to Housing Benefit


    Council tax
    Council Tax be applied to Housing Benefit

    • Changes to charges for Empty Properties

    • Change to charges for Second Homes

    • Everyone currently receiving exemptions have been notified


    Final Message be applied to Housing Benefit

    • Impact on individuals - Social Fund/Bedroom Tax/ CTRS – which do I pay?

    • Impact on Halton’s wider community- (less money in economy)

    • Collection issues for Council/RSLs

    • Confusion & uncertainties for everyone as Government amends legislation

    • ‘It won’t affect me’ syndrome - £100m reinforces this

    • Capacity issues of Council as its all in one area

    • Get in touch


    Current system reformed system

    Income related JSA be applied to Housing Benefit

    Income related ESA

    Income Support (inc SMI)

    Working Tax Credits

    Child Tax Credits

    Housing Benefit

    Universal Credit

    Current System Reformed System

    Disability Living Allowance

    Personal Independence Payment

    Pension Credit, Child Benefit, Carer’s Allowance (will remain)

    Council Tax Benefit ( to be replaced)

    Contributory JSA and ESA ( now has 52 week limit)


    Universal credit

    • Single means tested benefit be applied to Housing Benefit

    • Payable in or out of work

    • Initially for new claimants- stock transfer to follow

    • Oct 2013 for new claims, April 2014 to start transfer ( by Oct 2017)

    • Transitional Protection

    • Pilots being undertaken

    • Digital agenda

    Universal Credit


    Universal credit1
    Universal Credit be applied to Housing Benefit


    Universal credit risks impacts
    Universal Credit – Risks/Impacts be applied to Housing Benefit

    • Universal Credit will be paid directly to the customer.

    • Customer will need a bank account. (preferably one that will accept Direct Debits for rent payments.)

    • Will be paid monthly in arrears and to one person if part of a couple.

    • As yet still no definition of ‘vulnerable’ for payment to go to landlord.

    Potential substantial risk for increase in rent arrears


    Personal independence payment pip

    • PIP be applied to Housing Benefit

    • Replaces DLA for new claimants of working age from April 2013

      • -10,600 benefit claimants in Halton on DLA

    • Points based

    • Many currently entitled to DLA would not get PIP

    • Intention is to save money

    • Disproportionate effect on Halton

    • North West pilot

    Personal Independence Payment (PIP).


    PIP be applied to Housing Benefit


    Wider reforms

    • Tax Credits be applied to Housing Benefit

    • Eligibility criteria made harsher

    • Employment Support Allowance

    • Existing Incapacity claimants to be assessed against harder criteria for ESA.

    • Substantial proportion move onto Job Seekers Allowance

    • Child Benefit Reform

    • Restrictions for Higher Rate Taxpayers

    Wider Reforms


    Summary of welfare reform

    • A lot covered very be applied to Housing Benefitbriefly and very complex

    • Deserves more detail

    • Full detail of changes not yet available

    • Intentions – saving money

    • - less generous to benefit claimants

    • Help available through Welfare Rights Service (tel: 0151 511 8930)

    Summary of Welfare Reform


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